Work is due to start next month to convert and extend the former Water Authority treatment works in Greenfield Road, Douglas, to provide modern engineering facilities for Isle of Man College.
Tynwald approved spending of £3.08m to the Department of Education and Children on Tuesday.
Minister Tim Crookall is due to go back to Tynwald in June to seek approval for funding for the project’s second phase. That would see enlarged and improved facilities being created at the college for four construction crafts – brickwork, joinery, painting and decorating and plumbing – in the space vacated by engineering.
He said the project would produce well trained tradesmen and engineers for the benefit of the economy.
Douglas North MHK John Houghton moved an amendment calling for college apprentices to carry out work on the project, under the supervision of qualified tutors.
He said it could lead to savings of more than £2m. But he failed to get Tynwald support for the amendment, with a number of members raising potential issues with his idea.
The motion was passed with only Liberal Vannin MHKs Peter Karran (Onchan) and Kate Beecroft (Douglas South) voting against.
Phase one is due to be completed by August 2014 and open to students the following month.